Vets Affected By Calif. National Guard Bonus Debacle Would Not Owe Government Under House Bill

Veterans who received improper reenlistment bonuses from the California National Guard would not have to pay the money back to the Defense Department under a new House bill.

The legislation, supported by several House Republicans mostly from California, would ensure that those who served in the California National Guard and were overpaid by recruiters between 2004 and 2010 would not have to reimburse the government, unless they committed fraud or did not meet service requirements. The bill also would return with interest any repayments those veterans already have made, would require Defense to notify credit agencies that the debt was not valid, and would provide financial assistance to those who need it.

The Los Angeles Times in October reported that the California National Guard overpaid in reenlistment bonuses to about 10,000 soldiers to fight in Iraq and Afghanistan a decade ago.  About 2,000 of 10,000 recipients of the erroneous payments have been asked to return money. The Pentagon suspended its efforts to recoup the bonuses and financial incentives of $15,000 or more shortly after the news -- which sparked outrage among lawmakers, service members, and vets – broke. The department is reviewing its process for collecting the erroneous payments now, and hopes to resolve all the pending cases by July 1. However, according to another report from the Los Angeles Times, the California National Guard can’t locate more than 4,000 of the soldiers involved in the mess.

Rep. Jeff Denham, R-Calif., the bill’s sponsor, said it was “unjust” for the department to hold the service members liable for “a contract that was presented by an agent of the U.S. Army.” Denham said the legislation “seeks to right these wrongs and hold the administration accountable for the damage it caused.”

Republican Rep. Darrell Issa, another California lawmaker who is a co-sponsor of the bill, said that the “vast majority” of the cases involved vets who were offered bonuses and accepted them in good faith. “Many of those affected had their life savings depleted and credit ruined as they worked to repay these debts they never owed,” Issa said.

The Hill previously reported that Congress knew as far back as 2012 that the National Guard was trying to recoup the erroneous bonus payments made during the Bush and Obama administrations. The problem was not confined to California, but that is where auditors found many of the overpayments.